ABSTRACT

Revenue income to the Permanent School Fund, derived largely from oil and gas royalties from Texas State Lands, has declined dramatically over the last decade, even though an enormous hydrocarbon resource base still remains on State Lands. In fact, State Lands fields contain more oil and gas than have been recovered over the history of State Lands production. Rather than being unattainable, however, a large volume of this remaining oil and gas is recoverable through the strategic, or targeted, deployment of advanced recovery technologies. Although advanced technology has historically been the realm of major oil and gas companies, in pursuing economies of scale many of these companies have largely departed from the mature Texas resource base. The opportunity thus created has been enthusiastically grasped by other major and independent producers. Importantly, many of those producers are largely unsupported by advanced R&D capabilities--capabilities that the maturing State Lands resource base desperately requires.

The Bureau of Economic Geology, The University of Texas at Austin, with support from the State of Texas, is providing that critical technical support. The best prospects for increased production have been identified and, with the support of allied producers, are being drilled. This State of Texas Advanced Oil and Gas Resource Recovery Initiative (Project STARR) has one major goal--increased royalty income to the Permanent School Fund through the drilling of profitable wells. To date, nine fields have been chosen for assessment: Ozona; Geraldine Ford and Ford West; Lockridge, Waha, and Waha West; Keystone East fields of West Texas; and Umbrella Point and Copano Bay South fields of the Gulf Coast. Twelve Texas operators are currently involved in Project STARR: Bass Enterprises, Chevron, Conoco, Goldking Oil and Gas, Hallwood Energy, Manna Oil and Gas, Midland Resources, Mobil, Parker and Parsley, Shell, Union Pacific Resources Company, and Vista Resources. Project STARR has recommended 35 infill wells, 28 recompletions, and two side-track wells under the current program initiative. At least 21 infill wells and 19 recompletions have been drilled to date on State Lands on the basis of STARR recommendations.